The Long-Run Phillips Curve Shows That in the Long Run

question 314

Multiple Choice

The long-run Phillips curve shows that in the long run, policymakers can

• A) lower unemployment if they are willing to accept more inflation forever.
• B) lower inflation if they are willing to accept higher unemployment forever.
• C) choose the unemployment rate but not the inflation rate.
• D) lower inflation without increasing unemployment.

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Definitions:

Investment Banking

A sector within banking that deals with the creation of capital for other companies, governments, and other entities, through underwriting or acting as the client's agent in the issuance of securities.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, beginning in the United States and spreading globally.

Gold Standard

A monetary system in which a country's currency or paper money has a value directly linked to gold, allowing for the conversion of currency into a fixed amount of gold.

Tennessee Valley Authority

A federally owned corporation in the United States created in 1933 to provide navigation, flood control, electricity generation, and economic development in the Tennessee Valley.